Tesla Repays Department of Energy Loan Nine Years Early • Hacker News Board

Re: Tesla Repays Department of Energy Loan Nine Years Early

#121

Post by csense » Thu, May 23, 2013, 3:34 AM UTC

tomasien wrote: post #114

noname123 wrote: post #23

The reason why Tesla is able to pay the Dept of Energy loan early is because of a secondary stock and bonds offering worth about >850+ million. In another words, Tesla is raising funds by generating more debt (from bondholders) and diluting share value (from shareholders), roughly about 3.5 mil out of 40 mil float, and using that money to pay the US govt. TSLA rose on the news despite diluting shareholders is because…

WHO IS UPVOTING THIS PREDICTABLY NEGATIVE SHIT ON HN? What is this? How does this happen? I'm just stunned. Every single time. It's never even the "that's awesome! Keep in mind, there's this additional context" posts, it's just the "this isn't actually awesome, here's why" posts. NO. It's awesome that a private company sold stock that is hot because they're doing well to pay back public debt. Good for fucking them. P…

> WHO IS UPVOTING THIS PREDICTABLY NEGATIVE SHIT ON HN?

People who are interested in views that are contrary to the mainstream and don't want HN to become an echo chamber.

People who value critical, insightful analysis and discussion by people who are willing to question the "party line" of a particular product's marketing department and fan club.

People who don't care about catering to the whims of people who can't stand to read "negative" things on the internet.

> NEGATIVE SHIT

I question this characterization of noname123's comment. The third paragraph I read as healthy skepticism, not negativity for its own sake. It's certainly information that a responsible investor would want to carefully consider.

The comment certainly wasn't "shit," it was well-thought-out and informative. The commenter certainly did his homework.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#122

Post by tomasien » Thu, May 23, 2013, 3:46 AM UTC

csense wrote: post #121

tomasien wrote: post #114

Earlier quoted context omitted.

WHO IS UPVOTING THIS PREDICTABLY NEGATIVE SHIT ON HN? What is this? How does this happen? I'm just stunned. Every single time. It's never even the "that's awesome! Keep in mind, there's this additional context" posts, it's just the "this isn't actually awesome, here's why" posts. NO. It's awesome that a private company sold stock that is hot because they're doing well to pay back public debt. Good for fucking them. P…

> WHO IS UPVOTING THIS PREDICTABLY NEGATIVE SHIT ON HN? People who are interested in views that are contrary to the mainstream and don't want HN to become an echo chamber. People who value critical, insightful analysis and discussion by people who are willing to question the "party line" of a particular product's marketing department and fan club. People who don't care about catering to the whims of people who can't…

HN needs to not be an echo chamber, but the comment sections are becoming the opposite. If you're trying to justify a really pedantic but generally uniformative post (you say it's informative - how? I suppose you could have missed the 10 earlier HN threads about the stock sale, but it wasn't unknown info) by its third paragraph being healthily skeptical I think you're losing steam.

The problem isn't pointing out these facts - it's framing them as THE narrative and in a purely negative light.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#123

Post by duck » Thu, May 23, 2013, 3:47 AM UTC

ricardobeat wrote: post #119

duck wrote: post #94

Earlier quoted context omitted.

Read up on the "Model Cities Program" and I think you'll see what I was talking about, even in regards to automation. In terms of if GM had gone bankrupt, I think any supplier that was competitive at the time would still be here today. They may be supplying their goods to a different manufacture along with some other hardships, but companies that are competitive and in control of their workforce can make those change…

I think you underestimate the size and breadth of car manufacturing supply chains. Its very common for suppliers to build new factories/warehouses near a car manufacturing plant solely for them. You can just "make changes" if the plant is shut down.

I probably do underestimate it since I haven't worked directly in that industry, but I completely realize that fact. That is why I mentioned hardships. It might mean they have to close/resize assets and entire towns could be effected, but to say it would wipe them out I think is a stretch.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#124

Post by csense » Thu, May 23, 2013, 3:50 AM UTC

Uhhrrr wrote: post #31

3am wrote: post #11

Earlier quoted context omitted.

Why be mad at anything? At most be mad at car makers for running so leveraged that they had liquidity problems at the same time that all the major lenders in the financial system ran into solvency problems (and feel free to be mad at the financial sector) But given that, it was _excellent_ government policy to guarantee loans to the automakers, just from a cost/benefit perspective. And there's no shame in not going a…

GM was in trouble long before the 2008 crash: http://www.thetruthaboutcars.com/2008/06/general-motors-deat... (in June 2008, they were already up to part 181 in their series) Also, guaranteed loans for automakers might be excellent compared to other government policy, but given that Ford didn't take a loan, and there are many foreign companies which didn't need loans, the existence of any benefit from subsidizing mor…

> the existence of any benefit from subsidizing more poorly-run automakers is questionable

The automotive sector is one of the few manufacturing industries which hasn't totally packed up its bags and moved out of the USA entirely. They employ a lot of workers in politically important states and have powerful labor unions.

I live in an area that's been through tough times when a lot of industry went overseas c. 1980-2000, and much of the local political attitude is "government should do whatever it takes to keep plants from closing" -- not just among those directly employed by automakers and dozens of smaller suppliers, but among the entire community, since there's a feeling that dollars from those factory jobs indirectly support every local business.

I feel that the automotive bailout was a direct bribe to communities like mine, to calm the anger over the Wall Street bailouts by giving us a piece of the pie.

I think the whole thing stank, and voted accordingly -- not that I have any illusions that the current or future US government is or will be any better than it was in 2008-2009.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#125

Post by Coko » Thu, May 23, 2013, 4:15 AM UTC

guelo wrote: post #63

noname123 wrote: post #23

The reason why Tesla is able to pay the Dept of Energy loan early is because of a secondary stock and bonds offering worth about >850+ million. In another words, Tesla is raising funds by generating more debt (from bondholders) and diluting share value (from shareholders), roughly about 3.5 mil out of 40 mil float, and using that money to pay the US govt. TSLA rose on the news despite diluting shareholders is because…

Considering the terms of the government loan were very favorable (rates equal to the interest rates on Treasury notes in 2010) it doesn't make sense to me that they would want to pay it off early and get rid of all that liquidity. As a quickly growing company didn't they have something better to spend that $450 million on?

They paid it off early because the loan came with restrictive agreements that prevented Tesla to stay competitive. This is from Tesla's own words, see my post. https://news.ycombinator.com/item?id=5755082

Re: Tesla Repays Department of Energy Loan Nine Years Early

#126

Post by ryguytilidie » Thu, May 23, 2013, 4:22 AM UTC

BHSPitMonkey wrote: post #111

ghshephard wrote: post #101

Earlier quoted context omitted.

It's these type of posts that make it to the top of a thread that make me not want to check into HN. Can't we celebrate a company, that was called out as a bad stimulus target during the presidential debates actually paying back all their loans ahead of time? If there was one place I hoped I could go to celebrate an innovative company's success, it would be HN. I take particular issue with, "Make no mistake, this is…

> It's these type of posts that make it to the top of a thread that make me not want to check into HN. Posts that provide insightful explanation about the story? Yes, less of that and more unqualified positive gushing, please. There is nothing wrong with offering an informed opinion, even if (especially if) it's not in full alignment with the prevailing attitude of the hivemind.

Man, I'm really not sure that you could have missed his point any more. How could you read what he wrote and POSSIBLY think he was arguing that we need "more unqualified gushing"? You pretty much just made up a strawman and beat the bejesus out of it for no reason...

I'll be the first to call out unqualified gushing, but if that's what we're calling a factual account of a company paying back a loan I simply have to disagree with you.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#127

Post by tptacek » Thu, May 23, 2013, 4:23 AM UTC

ghshephard wrote: post #101

noname123 wrote: post #23

The reason why Tesla is able to pay the Dept of Energy loan early is because of a secondary stock and bonds offering worth about >850+ million. In another words, Tesla is raising funds by generating more debt (from bondholders) and diluting share value (from shareholders), roughly about 3.5 mil out of 40 mil float, and using that money to pay the US govt. TSLA rose on the news despite diluting shareholders is because…

It's these type of posts that make it to the top of a thread that make me not want to check into HN. Can't we celebrate a company, that was called out as a bad stimulus target during the presidential debates actually paying back all their loans ahead of time? If there was one place I hoped I could go to celebrate an innovative company's success, it would be HN. I take particular issue with, "Make no mistake, this is…

I didn't read this comment nearly as negatively as you seemed to have.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#128

Post by NickM » Thu, May 23, 2013, 4:37 AM UTC

hncommenter13 wrote: post #108

NickM wrote: post #106

Earlier quoted context omitted.

Note that they are still selling each car at a material loss; and only managed to show a profitable quarter by trading green credits they gained from their manufacturing. I'm not sure that's entirely accurate. I'm looking at their quarterly results for Q1 2013: gross profit was $96.3 million, but the ZEV credit sales were only $67.9 million for the quarter. Unless I'm missing something, it would appear that they are…

I believe you are missing something. "During the first quarter of 2013, we recognized $67.9 million in ZEV sales, which contributed to our gross margin. ZEV credit revenue should decline in future quarters relative to our automotive sales as we grow our sales outside the United States and earn fewer credits on the 60 kWh Model S battery variant for those sales that occur in the United States. Other regulatory credit…

Ah, good catch! I did miss that note about the $17.1 million. Also, the $11.3M is partly from other stuff - selling drivetrains for the RAV4 EV, selling apparel, etc - not just selling cars. However, it would seem my main point still stands: it's not accurate to say Tesla wouldn't be profitable without the ability to sell energy credits.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#129

Post by benaiah » Thu, May 23, 2013, 4:40 AM UTC

sjwright wrote: post #107

benaiah wrote: post #82

Earlier quoted context omitted.

Don't confuse free market advocacy with anarchy. Buying up judges, bribing other officials, and other fraudulent transactions, including stuff like misrepresentation of goods and other deceptive business practices, are not necessarily okay in a free market. However, direct government interference is. I don't advocate for a completely dog-eat-dog, caveat emptor society, but I do advocate for one in which those in powe…

So then who is going to "interfere" on behalf of the society at large? On behalf of the environment? Will individual consumers do what's right for the common good, for the first time in ever? Look, everyone is part socialist, part capitalist, part communist, part fascist, part anarchist. Just don't fall into the trap of thinking your current favourite blend of these colours is the one true path. If there's one thing…

I don't mean to imply I have the perfect system (though it obviously doesn't contain any errors I'm aware of), but rather that advocating a free market does not imply what he says it implies. Advocating a free market does not imply endorsing bribery and fraud. That was the extent of my point there.

Re: Tesla Repays Department of Energy Loan Nine Years Early

#130

Post by damoncali » Thu, May 23, 2013, 4:44 AM UTC

Coko wrote: post #113

I usually don't comment, but I'm surprised that I haven't seen anyone mention what I think is the most important part of the story. The DOE loan was an attractive low-interest loan. Why would they repay it early? Because the DOE loan had restrictive agreements that prevented Tesla to stay competitive. From page 44 of their May 10th Quarterly Report SEC Filing: "Our DOE Loan Facility documents contain customary covena…

Not terribly surprising. I've seen HUD loans up close, and if DOE loans are anything like HUD loans, they are a nightmare. Audits, escrows, and complexity 'til the cows come home.

Thanks for digging that up though, I was wondering why they refinanced it, as I assume the interest rate was pretty good.